Market sweats on rates, despite boom conditions

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The sharemarket is expected to remain under pressure because of
interest rate concerns, despite expectations most companies
reporting this week will deliver strong profits.

Last week, Reserve Bank governor Ian Macfarlane signalled rates
might rise as soon as next month, which should slow the equity
market's long bull run.

But investors are also worried about other issues that could
affect earnings, such as management changes, higher costs and
mergers and acquisitions.

"The RBA is clearly setting the scene for higher interest rates
and has warned that slower economic growth is to be expected," said
the chief economist at Goldman Sachs JBWere, Tim Toohey, who
expects interest rates to rise in March and April by a total of 50
basis points.

The S&P/ASX 200 Index fell 3.4 points to 4163.5 on Friday
and lost 10.5 points for the week.

According to Commonwealth Securities, aggregate earnings for the
117 companies that have so far reported interim results rose 35 per
cent to $13.3 billion.

Another 76 companies, or about 21 per cent of the S&P/ASX
200, report this week.

John Fairfax Holdings, owner of The Age, will be among those to
report today. Investors are expecting a 15 per cent increase in net
profit but will be more interested in an update on Fairfax's search
for a replacement for outgoing chief executive Fred Hilmer, and any
talks the company has been having with Canadian media group
CanWest.

NSW's largest independent coal producer, Centennial Coal, is
expected to report a weaker interim result because of lower
contracted coal prices but the second half is expected to be
strong.

Insurer AXA Asia Pacific is likely to post a flat result, after
a bumper year in 2003, although operating margins should be strong.
Other results due include surf, skate and snow wear company
Billabong, BlueScope Steel and Origin Energy.